What’s Next for ETFs After S&P 500 Hits Record High?

History suggests the stock market rally could have legs.

sumit
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Senior ETF Analyst
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Reviewed by: etf.com Staff
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Edited by: James Rubin

After two years, including multiple near misses the past seven weeks, the S&P 500 finally clawed its way back to all-time highs, surpassing the previous high of 4,797 set in January 2022.  

A rising stock market is good for most exchange-traded funds. Equity ETFs, whether they directly track the S&P 500, tend to rise with the index—a positive for both investors and fund managers.  

On Friday, assets under management across all 2,350 U.S.-listed ETFs hit a record $8.14 trillion. Of that, $6.4 trillion was invested in equity ETFs and $4.4 trillion was invested in U.S.-focused equity ETFs specifically. 

The question now becomes where the U.S. stock market goes from here? While nothing is certain, according to data from CFRA research, the S&P 500 tends to keep rising after exiting a bear market. 

Market Performance After Reaching All-Time High

On average, the index climbs 5.2% above its previous record high post-bear market before its first decline of 5% or more.  

However, the data—which looked at the period between 1946 through today—showed three occasions when the index rose less than 1% before selling off.  

On the other hand, in 1958, the S&P 500 surged as much as 22% above its previous high before the rally stalled, while in 1980, it jumped 7.4% before retreating.  

As always, past performance is no guarantee of what happens next, but it’s a guide that can be helpful in envisioning the possible range of outcomes.  

As of midday Monday, the S&P 500 was trading around 4,850, or 1% above the previous all-time high from 2022.  

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.